VI .I. Answer Desk: Is USVI Collecting Tax on Villas and AirBnB Rentals?

"I was pointing this out to make sure Alana knows she needs a VI business license to rent out her house after she moves to FL. LMAO"

Well...actually, NO, I don't, because I'm renting long term and I shall maintain my apartment on same property and vehicle and business licenses as I shall be back and forth, throughout the year.
As I shall declare any profits and losses and pay appropriate taxes.
I don't need a business license to rent long term.

Just because you think it appropriate to disregard the laws, doesn't
mean I do. You seem to think that's quite alright or am I wrong?

The folks that previously owned our condo had been renting it out long term for a few years after they left the island. Probably did not have a license, and they still got the $400 homestead discount on the property taxes to boot.

I personally feel that all that short term rent should do their do and pay the hotel taxes and jump through the hoops for a business license. There are probably hundreds of people who don't do either. And that certainly can add up. The raising of the hotel tax from 10% to 12.5% a year ago was a kick in the teeth to the people who follow the law. It was a lazy move on the government's part. Same goes for when they raised the gross receipts. They desperately need to figure out a way to simplify and streamline the business license process as well. Every 15 years I had a business here, it never once went smoothly. And often times took months and countless hours of time to get a renewal done. Sadly, there are lots of businesses here that are running villa management/rental companies that are ignorant to laws as well. They might pay the taxes, but they don't do it correctly. Hotel tax is a 'gross' tax and very few things can be deducted from the total cost when computing tax owed.

Hotel tax is a 'gross' tax and very few things can be deducted from the total cost when computing tax owed.

Perhaps, but if I have to declare the income, I'm going to declare every single expense associated with operating the short term rental. A portion of almost every household expense can then written off against income like electricity, lawn care, DISH network, broadband, AC maintenance, insurance, plumbing repairs, propane, renovations, advertising expenses, etc.

Whose to say, for example, that a "plumbing repair" was performed in the rental apartment rather than the owner's space? It wouldn't be hard to show a loss some years and lower my overall taxable income.

Is that what the government wants?

If someone is dishonest in one area of their life, they'll find it easier to be dishonest in other areas. I find it easier just to do the right thing, to the best of my ability, the first time out.

I think it's dishonest to coerce people into giving you money.

All tax should be consumption based & a flat rate, income tax is theft; period.

In my view, by supporting taxation like this, you are dishonest; even if you don't fully understand why (since you support income taxation, you don't understand).

I don't think you are doing the right thing here.

I don't enjoy giving my hard-earned money to the VI Government any more than the next person, considering we get so little in return. However, until the laws change, I'll abide by them.

"I was pointing this out to make sure Alana knows she needs a VI business license to rent out her house after she moves to FL. LMAO"

Well...actually, NO, I don't, because I'm renting long term and I shall maintain my apartment on same property and vehicle and business licenses as I shall be back and forth, throughout the year.
As I shall declare any profits and losses and pay appropriate taxes.
I don't need a business license to rent long term.

Just because you think it appropriate to disregard the laws, doesn't
mean I do. You seem to think that's quite alright or am I wrong?

You can only be a resident in one state/territory at a time. You will be a FL resident with a second home in the VI. You will RESIDE in FL in order to qualify for ACA. So, really, you should get a business license to long-term lease your house - or make sure it's claimed as part of your existing business license.

Just saying - not arguing. Good luck with your move!

BTW - I report rental income on my tax return though almost always take a loss after expenses.

I'll check it out, GM.
Thanks.

BTW - I report rental income on my tax return though almost always take a loss after expenses.

I suspect that would be the case with most short term rental operators. I know I could pile lots of household expenses onto my short terms rental income.

Keep in mind the owner is not paying the hotel tax, the guest is--no money out of your pocket.

You pay it when you travel and stay in a hotel or condo--in FL you also pay a city,county and state tax.
I don't understand all this bitching going on---do you want to live here and not pay any taxes?

I don't understand all this bitching going on---do you want to live here and not pay any taxes?

If it were only the paying of the taxes, most people wouldn't mind.

Its the all the BS they put you through in order to get to the point of paying the taxes.

Everything they put you through is a money grab and time waster...the Fire Inspection, the Tax Clearance Letter, the Business Licence, etc. It's all so tiresome and needless.

And all designed to separate you from as much of your money as possible in order to employ as many friends of the government as possible.

I will do everything I can to avoid having anything to do with the VI government as possible.

BTW - I report rental income on my tax return though almost always take a loss after expenses.

I suspect that would be the case with most short term rental operators. I know I could pile lots of household expenses onto my short terms rental income.

With all of the costs to keep up a residence, especially a condo with HOA, it's easy to always have a loss year to year with short term rental. Most owners are lucky to get 12 weeks of short term rental per year, most don't. So why do it? The goal may be to get close to break even and have some time for the owner to occupy. Income and deductions for not-for-profit rentals are put directly on the IRS 1040 and schedule A, the rental or business forms are only used in for-profit rentals. In the case of not-for-profit, only deductions (all deductions, not just rental related) over 2% AGI can be taken and you can't deduct a loss. No, the hotel tax is not deductible because it's not income but almost all other expenses are either 100% or as a percentage of rental use.

Hotel tax is a 'gross' tax and very few things can be deducted from the total cost when computing tax owed.

Perhaps, but if I have to declare the income, I'm going to declare every single expense associated with operating the short term rental. A portion of almost every household expense can then written off against income like electricity, lawn care, DISH network, broadband, AC maintenance, insurance, plumbing repairs, propane, renovations, advertising expenses, etc.

Whose to say, for example, that a "plumbing repair" was performed in the rental apartment rather than the owner's space? It wouldn't be hard to show a loss some years and lower my overall taxable income.

Is that what the government wants?

I don't think they really care if you do that or not because so few of these rentals operate at much of a profit any way. So they aren't going to get much out of it in the business aspect. The hotel tax is the 'for sure' thing. That is what they want, and you don't get to deduct operating expenses from that bottom line. You SHOULD deduct all of your expenses from your annual tax return, it's a business, and it should be handled like one.

how was the issue resolved ? I have the same situation